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The Importance of Skills for Innovation and Productivity

  • Someshwar Rao

    ()

  • Jianmin Tang
  • Weimin Wang

The fundamental importance of skills for productivity advance is being increasingly recognized. In this article, Someshwar Rao, Jianmin Tang and Weimin Wang of Industry Canada provide additional evidence of this relationship through a detailed examination of the dynamics of innovation and determinants of productivity at the firm and industry level in Canadian manufacturing. The firm-level data suggest that experienced employees and new university graduates, cooperation with other firms, product market competition, and government support for R&D, training, and technical assistance are the drivers of innovation. Levels of postsecondary educational attainment, especially university education, are found to be important determinants of inter-industry differences in productivity levels among manufacturing industries. The authors conclude that Canada could make significant progress in closing the Canada-U.S. productivity gap by increasing the proportion of the workforce with a university education relative to that in the United States, and by increasing R&D spending and the capital intensity of production.

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Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 4 (2002)
Issue (Month): (Spring)
Pages: 15-26

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Handle: RePEc:sls:ipmsls:v:4:y:2002:2
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  1. Someshwar Rao & Ashfaq Ahmad & William Horsman & Phaedra Kaptein-Russell, 2001. "The Importance of Innovation for Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 11-18, Spring.
  2. Jianmin Tang & Frank C. Lee, 2000. "Productivity Levels and International Competitiveness between Canadian and U.S. Industries," American Economic Review, American Economic Association, vol. 90(2), pages 176-179, May.
  3. Lavoie, Marie & Roy, Richard & Therrien, Pierre, 2003. "A growing trend toward knowledge work in Canada," Research Policy, Elsevier, vol. 32(5), pages 827-844, May.
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